Effectiveness…efficiency…economy

I guess lots of people these days are being asked to look for efficiencies, that happens a lot in recessions, or even at the end of them (who turns off more lights after getting the electric bill?). But, don’t you think what they really mean is “we want you to cut costs”.

In my mind (strange place that it is) Effectiveness, Efficiency and Economy are three distinctly different things that need to work in harmony.

• Effectiveness is about doing the right things properly;
• Efficiency is about doing those things making the best use of resources you have and
• Economy is doing things effectively and efficiently with the minimum necessary cost.

Now, to my mind, cost cutting is not the same as improving efficiency. For one thing, effectiveness is nearly always adversely effected. Think about it, if you get rid of a function, say Quality, in the name of efficiency because (as we all know) ‘quality is everybody’s responsibility’, who is going to research quality, analyse data, facilitate (for example) root cause analysis?

Now, I know a definition of ‘expert’ that suggests we’re all ‘unknown drips under pressure’, but I believe there is a place for the drip expert (I think we call them Knowledge Workers these days). The experts are those people who Dave Snowden would call Chefs, rather than Recipe Followers. Now, a lot of so called experts are merely recipe followers, but if you get rid of them all, it’s the same as throwing baby out with bath water.

What you are left with if you lose the chefs and informed recipe followers is people who can, at best, prepare a ready meal. Now, not all ready meals are as well produced as others, and generally none of them are as nutritionally beneficial as ‘real food’. So the meal solution/innovation/initiative cannot be as  effective as one that was prepared by the ‘Chef’. It will often take longer than if the chef had prepared it, and if being done by ‘da management’ (apologies to Hale and Pace) it will be more expensive.

So, if we take the traditional efficiency ratio of OUTPUT to INPUT, if we either increase the output or decrease the input then efficiency increases. If however, as in the above example, output decreases (reduced effectiveness) and input increases (more time at higher cost) then efficiency plummets.

The activity will appear more economic however. You have got rid of the ‘unnecessary’ cost know as ‘expert’. In the long term however, because effectiveness is reduced, costs will eventually increase.

So, you cannot be efficient if you are not effective and if you are neither of these, you will not be economic.

Thoughts on snow…and corrective actions

I am not a great thinker but I have to say that I do think and, occasionally, I have what I think are great thoughts (my opinion I know, but someone’s gotta love ya).

Over this last weekend I have been reflecting on the snow and its effects in sunny (today anyway) Oxfordshire. This is not just musing on snow, but snow and how it reflects what happens when poorly devised corrective (and preventive) actions are implemented.

The point of a corrective action is to correct identified failings and to prevent recurrence. It should be noted that preventive action is something implemented to prevent the failure in the first place.

If we look at our roads (the ones not covered in snow that is) we can see patches of different tarmac when potholes have been filled or cracks repaired. The guys doing the work have done the best they can within the system and no doubt take great pride in their work…most people do (I subscribe top McGregor’s ‘Y Theory’ as a general rule…remember the chap in the Dr Who episode Fear Her who was extremely proud of his work, Theory Y in action methinks).

Anyway, the roads are patched and there is little apparent attempt to prevent new cracks or potholes, analogous perhaps to many situations we find in industry. Along comes snow; my thinking is a little vague here, but let’s think of snow as some new fangled way of doing things, that covers up in a completely superficial way those cracks and blemishes.

The problems are many: snow is neither practical as a road surface nor particularly permanent; it is applied as a blanket ‘solution’ irrespective of the circumstances; and it certainly doesn’t integrate well with the previous surface or completed corrections.

So, the new fangled idea (snow) looks good for a while but, being superficial, goes away fairly quickly; for a time there are patchy residues, but in the fullness of time it all disappears. Unfortunately, in the act of disappearing, it undoes the good, if restricted work of the road repairers removing large lumps of tarmac and also works on the inherent weaknesses of the original surface, causing yet more potholes, thus making the situation worse than before.

Now I know the snow analogy is not brilliant and I had thought that the ‘tar and pebble’ approach that is often used on an annual basis may be a better one…unfortunately however, I lack the technical knowledge to comment accurately. Hopefully though, you can see where this comes from. My belief is that a well designed and integrated corrective or preventive solution is worth the short-term cost (time, money and inconvenience) to ensure that in the longer term, problems are not revisited. This is the effective and efficient way of ensuring that actual problems are corrected and do not recur and that potential problems are eliminated. The less well defined (short term) ‘solutions’ are generally not effective and they are certainly not efficient, often causing more grief than if the original situation had remained untouched.